Kentucky Governor Matt Bevin said in a radio interview this week that neither casino gambling nor marijuana would become legal in his state while he governs. Gov. Bevin was asked about his stance on those issues after a PFM Group, a notable consultancy group, called for legalized casino gambling in the Bluegrass State.
The governor said he would not sign a casino legalization bill into law, because of the “societal costs“. In the same radio interview, Matt Bevin said he would not legalize marijuana, due to the cost to society if weed were legal.
Matt Bevin acknowledges casino revenues are an option, though he believes they are a bad option. Other prominent leaders have ignored potential casino revenues altogether. In August, prominent Kentucky politicians like House Speaker Jeff Hoover and Senate President Robert Stivers said they had not heard a groundswell of support for casino legalization.
Kentucky Pension Crisis
Bevin’s statement came a few months after the governor called for “dramatic steps” in dealing with Kentucky’s pension crisis, which is acute. In a WHAS Radio broadcast in May, Governor Bevin said, “We’ve got to address and we are going to do it this year in special session, the pension crisis that we are facing.”
“And this is a crisis, I cannot overemphasis this to people: if we don’t make dramatic steps, and take real change-oriented steps, in the next month, the checks are going to stop coming in the next several years.”
$36 Billion in State Debt
Despite that warning some months ago, nothing has been done to mitigate the situation since. Kentucky’s governor and legislature should be able to agree on debt resolution, because both are in the same politicial party and the pension crisis is beginning to dominate the news.
The issue came up because Kentucky faces one of the largest debt crises of all U.S. states. According to the Kentucky Chamber of Commerce, the state faces a potential deficit of $36 billion. That amounts to a debt of $8,268 for every person residing in the State of Kentucky right now.
Illinois and Pennsylvania Deficit Spending
Meanwhile, the State of Illinois is considered to be under crushing debt, because it faces a $15 billion debt crisis. The Illinois government has not passed an official budget for 3 years, because its Republican governor and Democrat legislature cannot agree on ways to finance such a budget. Many believe the impasse will lead leading financial institutions to downgrade Illinois’ credit rating.
Pennsylvania faces a similar debt crunch, as it has to find the funding for a $2.2 billion deficit in its state budget. Like Illinois, Pennsylvania’s legislature has considered expanded gambling to find an answer to its financial woes. Not so with Kentucky, though its debt issues dwarf Illinois and Pennsylvania — and those states’ GDPs are 4 times and 3.5 times the size of Kentucky’s, respectively.
This is not the first time Governor Matt Bevin and Senate President Robert Stivers have disagreed with a PFM assessment. Earlier this year, PFM Group advised that the state needed to roll back benefits on pension payments. Kentucky pensioners received cost-of-living increases over the years, but PFM Group believes the state could reduce the deficit by rolling back those increases, which were unofficial in nature.
Kentucky Politicians Disagree with PFM Group
Kentucky’s government leaders seemed to view that suggestion as political poison. In an interview on the Leland Conway show, Bevin said, “Nobody, neither myself nor anyone in the legislature, thinks that we should be clawing back pay adjustments — COLAs as they are called — from retirees. It makes no sense.”
Several lawmakers were more direct in their opposition to PFM’s ideas. Senate President Robert Stivers said, “That’s a recommendation of PFM. And they do not have a seat” in the Kentucky legislature.
Kentucky Speaker of the House Jeff Hoover added, “It’s highly unlikely that that’s going to take place.”
Saying “No” to a Casino Legalization Bill
The problem with the current leadership is they seem to say “No” to every option for funding the debt. Governor Bevin, Speaker Hoover, and Senate President Stivers seem to have no idea how to resolve the pension crisis or the general budget deficit. When balancing the budget, a politician traditionally has to either increase taxes or eliminate services; neither of those options seems to be a working option for the government.
In those circumstances, raising revenues through legal casinos and marijuana sales is a third option. Over the years, Kentucky’s law enforcement and district attorneys have raided countless illegal gambling establishments. The state is surrounded by 5 other states with legal casinos. Kentuckians spend hundreds of millions of dollars per year in those out-of-state casinos. The “societal cost” the governor speaks about already exist, along with a monetary cost. Keeping that money in the state would make sense, because Kentucky residents are going to gamble, in any case.
